”Unreported Income:” The best way to get
IRS to send you a love note suggesting you two get together for a chat. That means an AUDIT!If you received W-2s and/or 1099s, guess who else got copies? Yup,the IRS.And they now have a sophisticated computer program that matches every W-2 and 1099 with 1040 Tax Returns.
Guess what happens when they get a 1099 that isn’t reported on your 1040? Hey,you’re quick!
Although most income you receive is taxable,and must be reported as “earned income”for tax reporting purposes, there are some types of income that is only partially taxed or not taxed at all. A complete list can be found in IRS Publication 525,“Taxable and Nontaxable Income.” (Here’s a direct link to download IRS Publication 525: http://www.irs.gov/publications/p525/index.html}
Some common examples of items NOT included in your income are:
-- Reimbursement for many Adoption expenses -- Child Support payments received by you -- Gifts, Bequests and Inheritances -- Workers' Compensation benefits -- Reimbursement for Meals and Lodging incurred for convenience of your employer -- Compensatory Damages awarded by a court for Physical Injury or Physical Sickness -- Welfare Benefits -- Cash Rebates from a stores, dealers or manufacturers.
